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Prospect Capital Corporation Message Board

rocky_6_66 2 posts  |  Last Activity: Aug 29, 2014 11:11 AM Member since: Aug 15, 1998
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  • Reply to

    Sovaldi prescriptions running ahead of consensus

    by notgildy Aug 29, 2014 10:16 AM
    rocky_6_66 rocky_6_66 Aug 29, 2014 11:11 AM Flag

    3rd quarter numbers will be better than US script numbers. EU numbers should increase significantly. Also, non-script sources will be stronger (VA, medicare, etc.). Overall, earnings will be down due to lack of tax rate adjustment, but sales should be close to flat even if average script numbers down 15-20%. JMO.

  • Reply to

    As measured by RSI it is overbought

    by dfwskier Aug 22, 2014 11:02 AM
    rocky_6_66 rocky_6_66 Aug 23, 2014 3:15 PM Flag

    "Absent adding 25-50 billion in sales (and it ain't doing that unless it buys another blockbuster drug from somebody), it's not going to double or triple from here anytime soon."

    1) On a p/e basis it is actually possible. Its earnings might exceed JNJ's in '15 and its growth rate (looking back) will be much higher. If the market gets carried away, it is possible to sell for 20-25 times $11-12/sh earnings in '15-'16.
    2) It could buy another blockbuster drug, as you noted. Unlikely, but possible.
    3) The market could go into bubble territory like '99-'00. If so, GILD selling for 25-30 times earnings will look cheap.
    4) GILD could put the buy-back into really high gear. With earnings over $15B next year, why not buy back $10-15B of stock. Taking 5-10% of the shares off the stock off the market would increase the price (or at a minimum put a floor on the price).

    Generally, I agree that a double or triple is unlikely. But the fact is that none of us know. That is why it is a gamble. I have made my bet - and it is a leveraged long bet. If it sells for 20 times '15 earnings, I will be mostly gone. But right now, I am comfortable holding.

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